May 03, 2016

Establish Yourself on the Corporate Pecking Order

On purpose, I wrote in an earlier post about staring down a couple of Executives.

There's a good reason I said this ... and it isn't to be a cantankerous wombat ... and it isn't to draw out a bunch of unsubs from catalog industry leaders, as has happened during this series (let that one sink in for a moment).

Marketing Leaders and Analytics leaders own a marginal slot on the corporate pecking order ... above janitor (#custodialservices), but somewhere below the person who fixes the air conditioning ducts. We know this is true ... at least I know this is true ... when I worked at Nordstrom, one of the air conditioning ducts funneled super-chilled air on my customer acquisition manager. I requested a repair ... my request was always prioritized at #22,943 ... so one day, I climbed up on a chair, and used duct tape and cardboard to re-direct the chilled air. The interim CEO of the online business, who I reported to, saw what I was doing and called me in his office. Here's how our conversation went:

Interim CEO: You are a Vice President at one of the largest companies in the history of commerce. You do not fix air conditioning issues ... we hire people to do that stuff for you. Do you know why we hire people to do that stuff for you? It's because you are a Vice President at one of the largest companies in the history of commerce. You have other things to focus on.

Kevin: I have made numerous requests to have the issue fixed. I am at #22,943 on the facilities repair pecking order. I can show you where they prioritized my request, if you like.

Interim CEO: Any credible Vice President should be able to put the hammer down and get this problem solved. Put the hammer down.

Kevin: Alright.

The problem never got solved, hammer or no hammer.

Maybe I didn't know how to put the hammer down.Or maybe marketing folks don't have a hammer to put down.

I suspect I'm not alone. I've sat in countless meetings where the Chief Marketing Officer shares his/her findings or outlines his/her plan, only to have the Chief Financial Officer or the Chief Operations Officer tell the rest of the room what the "real" marketing plan will be. Happens in at least 50% of the meetings I attend. It is disrespectful, and it must change. Does the Chief Marketing Officer determine the robotics strategy used in the warehouse? No! Then why the heck does the CFO or COO or Chief Merchandising Officer constantly steamroll the marketing leader?

As you rebuild your catalog marketing function, it is critical that you move up the Corporate Pecking Order.

How do you do that?

Measure Merchandise Productivity.

If you want to flip the script, hire yourself a great programmer (not a #datascientist, for merchandise productivity will bore the living daylights out of a #datascientist, and there isn't one 33 year old #datascientist who has interest in working with a catalog brand anyway), and make sure you measure every single aspect of merchandise productivity.

Why?

First of all, it is far more common for your failures to be linked to a failure to improve merchandise productivity than a failure in marketing strategy. Marketers are frequently blamed for merchandising problems ... losing jobs every two years because "the wrong customers" were contacted ... or because "it was your job to grow the business" even though customers hated the merchandise.

By publishing Merchandise Productivity every single week (yes, every single week), you flip the script. You put success squarely in the sweaty palms of your Merchandising Leader. You outline failure to your entire Executive Team, so that your team focuses on what is truly important.If you don't flip the script and establish yourself as more than a plebe on the corporate pecking order, then the first time business doesn't meet expectations it will be your fault.

Yes, your fault.And once it is your fault, that stink doesn't leave you. Every Executive immediately knows you are the problem, even though you did nothing wrong.

At every meeting, at every opportunity, teach your co-workers what Merchandise Productivity is. Make it very clear that success/failure is rooted in Merchandise Productivity. Make it very clear that your Customer Acquisition efforts simply amplify success/failure in Merchandise Productivity.

Do this at every single meeting, regardless whether it is an Executive Team meeting or a meeting of your facility services team. You are not doing this to be nasty. You are doing this to teach every single employee why your business succeeds or fails.It is time to stand up for yourself. Be a leader!

2 comments:

Just to make sure I'm on the same page re: definitions. Merchandise productivity is defined as revenue divided by amount/quantity of merchandise? Essentially avg. rev per merch?

After measuring that, how do we know if our merch productivity is good/bad or is it mainly to use as a baseline and see if we improve?

Also, what is wrong with increasing revenue but merch. productivity going down b/c we've added a lot of merch? Is the assumption that merch. has an acquisition cost so merch. productivity means ROI for merch acquisition is dropping? Or that having unproductive/unnecessary merch takes up mindshare for our customers?

Trend the metrics over 2-3 years, and you'll quickly know if your merchandise productivity is up or down.

Now, if your merchandise productivity is flat and you increased skus/styles, well, there's all sorts of inventory ramifications. It means you added to your assortment, you purchased more merchandise, and the customer spent the exact same amount. This means you'll be overstocked and you'll be liquidating merchandise at low gross margins. You won't be as profitable.

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Kevin Hillstrom, President, MineThatData

Kevin is President of MineThatData, a consultancy that helps CEOs understand the complex relationship between Customers, Advertising, Products, Brands, and Channels. Kevin supports a diverse set of clients, including internet startups, thirty million dollar catalog merchants, international brands, and billion dollar multichannel retailers. Kevin is frequently quoted in the mainstream media, including the New York Times, Boston Globe, and Forbes Magazine.

Prior to founding MineThatData, Kevin held various roles at leading multichannel brands, including Vice President of Database Marketing at Nordstrom, Director of Circulation at Eddie Bauer, and Manager of Analytical Services at Lands' End.

You may contact kevin at kevinh@minethatdata.com.

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